SERVING CORPORATIONS UNDER BCL 306

See NOTE below.

Siemens Elec. LLC v New York Elec. Power Servs. LLC, 2019 NY Slip Op 32715(U), September 11, 2019, Supreme Court, New York County, Docket Number: 653803/2018, Judge: Arlene P. Bluth:

""CPLR 5015 (a) provides that a party may be relieved from a judgment on the ground of, among others, 'excusable default.' A defendant seeking to vacate a default under this provision must demonstrate a reasonable excuse for its delay in appearing and answering the complaint and a meritorious defense to the action" (Eugene Di Lorenzo, Inc. v A.C. Dutton Lumber Co., 67 NY2d 138, 141, 492 NE2d 116 [1986]).

While a corporation is required to keep its address updated with the Secretary of State, mistakes happen, and the Court may relieve a defendant of its default for that reason as a reasonable excuse. "It is also well established that service on a corporation through delivery of process to the Secretary of State is not personal delivery to the corporation or to an agent designated under CPLR 318. Thus, corporate defendants served under Business Corporation Law § 306 have frequently obtained relief from default judgments where they had a wrong address on file with the Secretary of State, and consequently, did not receive actual notice of the action in time to defend" (Eugene Di Lorenzio, Inc. v A.C. Dutton Lumber Co., Inc., 67 NY2d 138, 141, 42, 501 NYS2d 8 [1986] [citations omitted]). This Court finds defendant's mistake excusable."

NOTE: Judge Bluth earlier that year held the same in HESS CORP. v. 936-938 CLIFFCREST HOUS. DEV. FUND CORP., 2019 NY Slip Op 30384 - NY: Supreme Court 2019:

"The fact is that courts often grant motions to vacate default judgments where the summons and complaint was served via the Secretary of State and the corporation claims it never received the commencing papers (Eugene Di Lorenzio, Inc., 67 NY2d at 141). Case law is clear that these types of cases should be decided on the merits."

Yet Judge Engoron this year may have felt differently in Commissioners of State Ins. Fund v. NEWGLE CORP., 2019 NY Slip Op 31456 - NY: Supreme Court 2019:

"Service of process upon a corporation under Business Corporation Law § 306 (b) is complete upon delivery of the summons and complaint to the Secretary of State (see State Farm Mut. Auto. Ins. Co. v Dr. Ibrahim Fatiha Chiropractic, P.C., 147 AD3d 696, 696 [1st Dept 2017], lv denied 29 NY3d 912 [2017]). Jurisdiction is obtained "irrespective of whether the process ever actually reached [the corporate] defendant" (Shanker v 119 E. 30th, Ltd., 63 AD3d 553, 554 [1st Dept 2009])."